While a new digital currency proposed by payments services company Qiwi, dubbed the BitRuble, has led to harsh criticism from a top Russian official, the head of the country’s largest bank Sberbank has admitted to owning bitcoin.
Sberbank CEO is a bitcoiner
Just because Russia has quasi-banned Bitcoin for use by the proletariat doesn’t mean the Russian elite don’t horde see the value in ownership. Earlier today,
Sberbank CEO German Gref proclaimed himself a bitcoin owner at Finnopolis 2015, a finch conference held in Kazan this week.
"I am one of the victims, I have a small amount of bitcoins," he said jokingly at the fact that in recent years this cryptocurrency has decreased in price. "Only one currency in the world has devalued more that the ruble — bitcoin."
One not to be misunderstood
Russia has had a difficult time with the advent of digital currencies in the country, leading to de facto bans of Bitcoin and related websites. From the outside looking in, Russians seem to be pretty clear on their intentions, and the Russian Financial Ombudsman Pavel Medvedev seems no different following the announcement of Qiwi’s digital currency plan to roll out the “Bitruble.”
His response was simple and plain:
"It's absolutely illegal, such technical hooliganism absolutely inappropriate. The Constitution says who has the right to Russia to issue money; it is the (Russian) central bank. The only currency in Russia is the ruble. The rest of the money is illegal, and this kind of disgrace (would be) a criminal offense.”
- Pavel Medvedev
The views on Bitcoin and digital currencies have run the gamut worldwide, from total ignorance, to over-regulation, to indifference, to banning, to taxation. Bitcoin has many positives and negatives for nation-states to consider. Russian officials have chosen to focus on the potential for money laundering and terrorist funding through digital currencies, above all its other potential uses.
Central Bank head Elvira Nabiullina, in particular, has touted this defense against Bitcoin and others of its ilk. Central banking executives having a clear conflict of interests when it comes to reducing economic competition domestically seems to be beside the point.
“The problem is that criminal law is implemented through the penal system: when it’s minor hooliganism, you get 20 years in prison, but when it undermines the financial structure of the state, they will sit and think for a long time on how to approach this. The issue of a parallel currency is a crime," Medvedev said on the radio station “Moscow Talk.”
In closing, the moral of the story is just because the Russian financial elite hold bitcoin doesn’t mean the Russian people can, too. The negativity towards alternate currencies doesn’t preclude Russia from hosting their own digital currency in the future. That potential outcome may also influence their interest in allowing any third party to get that ball rolling outside of the central bank’s control.
But for now, it seems like Russians, who are not banking CEOs, will get Russian fiat currency or nothing at all.